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EIA Publishes Regional Electricity Supply and Pricing Forecasts Using UPLAN Model

LCG, August 13, 2019--The U.S. Energy Information Administration (EIA) announced that it is revising the presentation and modeling of its forecasts for electricity supply and market hub pricing to better reflect current electricity markets and system operations in the U.S. Beginning with the August 2019 Short-Term Energy Outlook (STEO), the new forecasting approach models electricity markets using the UPLAN production cost optimization software developed by LCG Consulting. EIA uses the solution results provided by this proprietary model to develop the STEO forecasts of monthly electricity generation, fuel consumption, and wholesale prices.

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Dominion Energy Virginia Pursues 500 MW of Renewable Projects

LCG, August 8, 2019--Dominion Energy Virginia announced Monday that it is seeking bids for up to 500 MW of renewable capacity in both 2021 and 2022 to increase its clean energy resources. Dominion Energy stated that it is committed to having 3,000 MW of solar and wind in operation or under development in Virginia by 2022. This near-term step is part of an ultimate company commitment to reduce carbon emissions by 80 percent by 2050 across the 18 states it serves.

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Industry News

California Capsule: Bush Will Meet with Davis Next Week

LCG, May 24, 2001President Bush will take time during a trip to California next week to meet with Gov. Gray Davis, who has accused the president and Vice President Dick Cheney of favoring their "Texas pals" by refusing to impose federal price caps on wholesale electric power in the Golden State.

Bush plans to visit the Marine Corps base at Camp Pendleton, the Fresno area and Los Angeles in the first part of next week and will see Davis on Tuesday or Wednesday. Spokesmen for neither the president nor the governor were able to furnish details.

Since Bush released his administration's energy policy a week ago, Davis has stepped up his attacks on the president, saying he and Cheney have turned a blind eye to price gouging by Texas-based power producers because of their close ties to the energy industry.

So far, Bush has ignored the attacks. "The president's focus is going to be on solving problems," White House spokesman Ari Fleischer said yesterday. "He's not interested in finger-pointing."

Davis, of course, is dependent on finger-pointing to shift responsibility for the California electricity crisis away from his administration and the Democrat-controlled legislature that created it. He has repeatedly blamed the state's problems on Texas-based power producers.

"There's a massive transfer of wealth going on from ordinary citizens in California to companies in Texas," the governor has said.

Fleischer said "The federal government is going to be a strong partner to the state of California in the cause of energy conservation to help ease the burden in the summer months, when demand is high and blackouts are mosrt at risk."

SDG&E Wants to Pay Businesses to Use Back-up Generators
San Diego Gas & Electric Co. has asked the California Public Utilities Commission to approve a plan under which the utility would pay local industries to fire up their back-up generators during power emergencies this summer.

SDG&E estimates that its industrial customers could put 50 megawatts of power on line when it's needed most, and significantly minimize if not eliminate the need for blackouts in the company's service territory.

The utility has checked with some of its customers and found them willing to go along with the plan. "Customer willingness to participate has been quite strong, if the proper incentive are in place," said Debra Reed, SDG&E president.

The California Air Resources Board is against the plan because the back-ups are mostly diesel-fueled generators. Michael Kenny, executive director of the board said in a letter "The SDG&E proposal would expend ratepayer dollars on extremely polluting and expensive power, decrease participation in more sound conservation programs and not make a significant difference in the number or extent of blackouts."

But Richard Smith, assistant director of the San Diego County Air Pollution Control District, said his board believes the plan would not only spare businesses millions of dollars in lost revenue but would prevent the even greater air pollution that will occur when every back-up generator kicks in during a blackout.

CPUC to Evaluate Residential 'Baselines'
CPUC President Loretta Lynch said her agency is looking into whether residential "baselines," the level of use upon which rate hike amounts are predicated, are fair and reflect the realities of households to which they apply.

"I think it's clear that baselines were set too low and didn't reflect actual electricity usage," Lynch said.

She is correct, in that the baselines were not set to be the basis of rates paid for ordinary power use. The baselines were set in the 1980s as standards for reduced usage on which "lifeline" service could be based.

As it is, a typical householder using 500 kilowatt-hours of electricity in a month is probably exceeding his baseline by well over 30 percent. By doing so, he is subject to significant rate increases under the recent CPUC ruling that increases state electric rates by $5.7 billion.

Power Crisis Pushes Money out of California Bond Funds
California municipal bonds represented only 3.8 percent of all tax-exempt mutual fund assets but, in April, accounted for 29 percent of the nationwide outflow of investment in such portfolios, CBS MarketWatch reported.

Investor pulled $3.5 billion out of the California tax-free fixed-income funds in the past two months, fund analyst Lipper Inc. said.

And California money market funds, representing $35 billion in assets, lost $3 billion in April, or 8.6 percent of their assets. This compares to an outflow of $420 million in March.

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